March 23 (Bloomberg) -- Chile’s peso had its steepest weekly decline since December as concern Chinese growth is slowing dimmed the outlook for Chilean commodity exports.
The peso, little changed at 489.05 per U.S. dollar today, fell 1.3 percent since March 16, the biggest weekly drop since the five days through Dec. 16.
Copper, which accounts for more than half of Chile’s exports, lost 1.8 percent in New York this week after data indicated manufacturing in China, the biggest buyer of Chilean copper, may be slowing. The metal for May delivery advanced today on speculation that higher energy costs will limit production of raw materials.
“The peso finally broke through the 488 level that had been the top of its range,” said Katia Diaz, an economist at 4Cast Inc. in New York. “Heading into the weekend with the euro falling and risk coming off, it seems the market doesn’t want to go long pesos.”
China, the second-largest economy, has been Chile’s biggest customer for the past three years. In the fourth quarter of last year, China bought a record $4 billion of Chilean copper, more than double the amount bought by the U.S. and Japan combined.
Chilean interest-rate swaps rose today, trimming the first weekly decline since January. Swaps fell earlier this week as lower commodity prices led investors to cut bets on rate rises.
The two-year swap rate climbed five basis points, or 0.05 percentage point, to 5.32 percent today, reducing a weekly decline to 13 basis points. The two-year breakeven inflation rate reduced a weekly decline to 19 basis points.
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